Teenage jobless rates touch record high

Pity the unemployed, but pity especially the young and unemployed.

This August, the teenage unemployment rate — that is, the percentage of teenagers who wanted a job who could not find one — was 25.5 per cent, its highest level since the government began keeping track of such statistics in 1948. Likewise, the percentage of teenagers  who were working was at its lowest level in recorded history.

“There are an amazing number of kids out there looking for work,” said Andrew M Sum, an economics professor at Northeastern University. “And given that unemployment is a lagging indicator, and young people’s unemployment even lags behind the rest of unemployment,”

Recessions disproportionately hurt America’s youngest and most inexperienced workers, who are often the first to be laid off and the last to be rehired. Jobs for youth also never recovered after the last recession, in 2001.

But this August found more than a quarter of the teenagers in the job market unable to find work, an unemployment rate nearly three times that of the nonteenage population (9 per cent), and nearly four times that of workers over 55 (6.8 per cent, also a record high for that age group).

An estimated 1.64 million people ages 16 to 19 were unemployed. Many companies that rely on seasonal business, like leisure and hospitality, held the line and hired fewer workers this summer — a particular problem for teenagers. In Miami, 18-year-old Rony Bonilla spent past summers busing tables at restaurants and working at the Miami Seaquarium. He said he set out to find another job this summer, but dozens of businesses, like Walgreens, Kmart and Chuck-E-Cheese, turned him down. Bonilla said he and many of his friends were unable to find any job offers beyond commission-only employment scams.

“I’m looking for anything to pay the bills,” he said. “You name it, I applied. And I never even heard from them.” Expecting record unemployment among youth, Congress set aside $1.2 billion in February’s stimulus bill for youth jobs and training.

As with everything stimulus-related, supporters, like Jonathan Larsen of the National Youth Employment Coalition, say the money has tempered a bad situation, although the overall numbers are dismal. Economists say there are multiple explanations for why young workers have suffered so much in this downturn, but they mostly boil down to being at the bottom of the totem pole. Recent college graduates, unable to find higher-paying jobs, are working at places like Starbucks and Gap, taking jobs once held by their younger peers. Half of college graduates under age 25 are in jobs that do not require college degrees, the highest portion in at least 18 years, Sum said.

Likewise, the reluctance or inability of older workers to retire has led to less attrition and fewer opportunities for workers to move up a rung and make room for new workers at the bottom of the corporate ladder. Increases in the minimum wage may have made employers reluctant to hire teenagers, said Marvin H Kosters, a resident scholar emeritus at the American Enterprise Institute.

High teenage jobless rates may also be distorted by other factors.  The ability of more young people to rely on family may allow them to be pickier about jobs and stay out of work longer than they did in previous recessions, said Dean Baker, Co-director of the Centre for Economic and Policy Research.

Additionally, with more students applying to college, the remaining pool of job applicants may be less desirable to employers.

“Maybe the most employable kids pull out of the labour force, making the numbers for what per cent of kids are looking for jobs appear even worse,” said Harry J Holzer, an economist at Georgetown University. The decision of more young people to attend college, which could help them increase their earning potential later in life, may be one silver lining of the recession, economists say.

Similarly, back when graduating from high school was a rarer achievement, the Great Depression pushed potential dropouts to stay in high school because work was so hard to come by.

But there is a bit of a catch-22: Many college students need to work to pay for college. Half of traditional-age college students work 20 hours a week, Lawrence F Katz, an economics professor at Harvard, said. “In today’s labour market, the big margin comes from going on to college, not just graduating high school,” he said. “Unlike the decision to finish high school, that’s not something you can do free of tuition.”